The algorithm script is based on a momentum and trend strategy and depends on a filter technique to filter false signals. The filter technique lowers the impact of random price fluctuations and is used to identify changes in price trends.
The Ultra Trend indicator works very well for all instrument types and timeframes. It works especially well for stock-based instruments that are in a trend or in a wave movement. It can be used for regular long and short entries/positions, as well as for swing trading strategies and long-term investments.
It is very important that you optimize the indicator settings. Each financial instrument has its own rhythm, so you must adjust and fine tune settings to optimize the trading signals. You can tune and tweak the indicator settings to improve signal generation accuracy. Settings can sometimes be very individual, depending on your trading style and timeframe used.
The default settings of the Ultra Trend indicator are optimized for use on all timeframes. If you use the indicator to trade lower or higher timeframes, you may need to adjust the default settings to optimize it for your trading style and instrument type.
How to use:
1. Use on any instrument and timeframe (finetune Settings).
2. When ‘Buy’ signal is confirmed (Green triangle, up ▲) –> enter Long position.
3. When ‘Sell’ signal is confirmed (Red triangle, down ▼) –> exit Long position (or go Short).
4. Exit also when -> trade hits your profit target/limit or stop loss (determined by user).
IMPORTANT: Wait for candlestick close to ensure signal is a confirmed signal!
Exactly how the indicator is used varies from trader to trader. It can be used as a scalping tool in shorter timeframes, but also as a timing indicator for day trading or swing trading strategies, where you get accurate and profitable entry and exit signals for all timeframes.
This indicator has been developed to work with regular bar candles, but we also recommend you to use it with Heikin Ashi candles to filter out as much noise as possible and as these often have an improved ability to capture high-quality trends.
⚠ If you are new to trading and/or technical analysis in general, we always recommend a demo account (“paper-trading”) until you become familiar with how to use the indicator.
Ultra Trend is a non-repainting indicator (meaning that signals do not change or disappear after bar close).
When using the Alert function, use the “Once Per Bar Close” configuration and wait for bar close to confirm entry/exit signal.
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